Taxation of Chargeable Gains Act 1992 Schedule 1B paragraph 2

Attribution of gain to residential property

Schedule 1B paragraph 2 explains how to calculate the portion of a chargeable gain on a land disposal that is attributable to residential property, using a day-count fraction based on dwelling use during the applicable period.

• The residential property portion of a gain is calculated by multiplying the gain by a fraction: the number of days the land included a dwelling, divided by the total number of days in the applicable period.
• Where land has been in mixed use (containing both dwellings and non-residential land on the same day), adjustments must be made to reflect those different uses.
• The applicable period runs from the later of the date the interest was acquired or the date it became chargeable, through to the day before disposal.
• If the disposal relates to a contract for land that includes a building to be constructed or adapted as a dwelling, the land is treated as including a dwelling throughout the entire applicable period.